For G-7, Trump’s racism and misogyny are ok, but his trade policies are intolerable

U.S. President Donald Trump greets Canadian Prime Minister Justin Trudeau during the 2017 G-7 Summit in Italy. (Official White House Photo by Shealah Craighead)

U.S. President Donald Trump seems as welcome at the G-7 picnic as a rabid skunk.

Most G-7 leaders have worked to build warm relationships with Trump, despite his xenophobia, racism, misogyny, climate denialism, warmongering and corrupt business self-dealing. But apparently, taking on the trade status quo was a bridge too far.

That is a bitter irony, given that the trade and financial policies that the G-7 has relentlessly promoted created the political context that helped to make Trump president. Decades of U.S. presidents from both parties and their G-7 counterparts have pushed international economic policies that have created expansive new rights and powers for multinational corporations and hurt working people.

Pushing corporate-rigged trade agreements, blessing financial deregulation and loosening trillions in speculative investment flows were the economic priorities.

Even as millions of manufacturing jobs were lost, absent was coordinated G-7 action to counter China’s currency manipulation or a unified approach to end Chinese subsidies and other unfair trade practices that, among other problems, fueled the global steel and aluminum oversupply glut.

And as working-class wages declined and income inequality and financial instability grew, the majority harmed by the G-7 version of globalization were told their fate was inevitable.

In the United States, that message was conveyed by Democratic and Republican presidents alike even as the economic and social fallout became increasing difficult to deny. About 4.5 million net American manufacturing jobs have been lost since the 1994 start of the North American Free Trade Agreement (NAFTA) and 2000 trade deal with China related to its admission to the World Trade Organization. Sixty-thousand manufacturing facilities shuttered. And real wages flattened, given that the replacement of the higher-wage manufacturing jobs with lower-wage service sector jobs pushed down wages economy-wide even if one did not lose their job to trade.

Enter Trump, who, whatever else his trade policies may or may not do, ended the bipartisan presidential practice of not seeing or talking about the many Americans who have been harmed by our trade status quo.

Therefore perhaps Trump’s truly unforgiveable sin, finally meriting open ire from G-7 partners, is to demonstrate that the trade status quo is, in fact, not pre-ordained, but rather is a set of policies he is shredding.

Trump may well not achieve the better trade outcomes he promised.

That would require him to stay focused on changing China’s cornucopia of unfair trade practices rather than settling for the usual Chinese promises to buy more U.S. exports. And, unless he can implement a replacement deal that eliminates NAFTA’s investor-state outsourcing incentives and adds strong labor and environmental terms with swift and certain enforcement to raise wages, companies will keep moving jobs to Mexico to pay workers a pittance and dump toxins and import those products back for sale here.

And, the U.S. corporate lobby is in overdrive working against any attempt to change the trade policies to preserve the status quo. Doing so is apparently a higher priority for them than preserving the Republican congressional majority. The Koch Brothers just announced a campaign designed to line up congressional Republicans against Trump’s trade agenda before the midterm elections, even as polls show GOP and Independent voters support that agenda.

Plus, Trumpian chaos has led to Trump caving on well-thought-out policies, such as the China trade enforcement action aimed at dismantling the technology theft essential to the China 2025 agenda to dominate industries of the future. That approach was revived, for now.

But whether or not Trump’s trade policies succeed, the other G-7 leaders should reflect on the painful lesson of Trump’s rise and that of other authoritarian politicians who wrap themselves in economic populism: Political leaders who fail to offer a new approach on trade and the related economic policies that provide greater economic security for all only serve to alienate more and more people who are left behind, creating fertile political ground for more Trumps.

Trump’s pledges to upend the trade status quo, end job outsourcing and create manufacturing jobs attracted hard-hit working-class votes in the key Midwestern swing states that put him in the White House. And President Barack Obama’s relentless efforts right through the 2016 campaign to pass the business-as-usual Trans-Pacific Partnership (TPP), and Secretary Hilary Clinton’s ambiguous views on the TPP and connection to President Bill Clinton’s NAFTA, dampened working-class enthusiasm for the Democratic ticket.

If Trump’s foreseeably cringe-worthy exploits at the G-7 don’t drive home this point, perhaps yesterday’s election of Doug Ford — considered the Donald Trump of Canada and brother of the infamous right-wing, populist, crack-smoking Ontario Mayor Robert Ford — as Ontario’s new Premier will.

Growing Attention to Obama Trans-Pacific Trade Pact Threatens to Undermine Offshoring Attack on Romney as TPP Talks Wrap Up Today

SAN DIEGO – Growing congressional, state legislator and activist protests of closed-door negotiations on the Obama administration’s first trade pact, the Trans-Pacific Partnership (TPP), threatened to undermine the Obama campaign’s attack on Mitt Romney’s Bain Capital U.S. job offshoring activities. The latest round of TPP talks wrapped up today in San Diego following a week of protests outside the venue, growing concern about TPP in Congress, a letter warning of opposition from state legislators representing all 50 states and delivery of two different petitions with nearly 100,000 signatories each.

A text of the TPP’s investment chapter that leaked last month shows that it includes an expanded version of the rules in the North American Free Trade Agreement (NAFTA) that incentivize investment and job offshoring by eliminating the risks of relocating to lower-wage countries and guaranteeing preferential treatment for relocated firms.

 “U.S. negotiators have tried to keep TPP negotiations totally below the radar, but even so opposition to the current “NAFTA-on-steroids-with-Asia” approach is escalating, which is good news for the public but a serious complication for the Obama campaign’s attack on Romney as a U.S. job offshorer,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

During last week’s secretive TPP talks in San Diego, state legislative leaders from all 50 states sent a letter to President Barack Obama’s senior trade official, warning that they will oppose the deal unless the administration alters its current approach. “The lack of transparency of the treaty negotiation process, and the failure of negotiators to meaningfully consult with states on the far-reaching impact of trade agreements on state and local laws, even when binding on our states, is of grave concern to us,” the legislators wrote in their July 5 letter.

 During the TPP negotiations, Internet freedom activists delivered 90,000 signatures calling on U.S. negotiators to stop their insistence on pushing restrictive intellectual property programs similar to the controversial Stop Online Piracy Act (SOPA). The AFL-CIO also delivered nearly 90,000 signatures on another petition criticizing the TPP and calling for fair trade. The text of the petition stated, “Past FTAs have accelerated the shift of jobs overseas, made it harder for our own government to spend our tax dollars on Made in America products and put corporate profits before the interests of working families here and in other countries. It’s past time for our leaders to support trade rules that reward companies that invest in America so we can rebuild our nation.”

 On June 27, an overwhelming majority of House Democrats (133 members), led by U.S. Reps. Rosa DeLauro (D-Conn.) and George Miller (D-Calif.), sent a letter to the administration criticizing the secretive TPP negotiating process, demanding public release of the TPP text and raising alarm about TPP proposals that replicate past pacts and could increase drug prices, undermine Buy American policy and expose U.S. laws to attack in foreign tribunals. The letter, sponsored by two members of the House Democratic leadership, was signed by almost every Democratic full committee ranking member and Appropriations Committee ranking member, as well as many Ways and Means Committee members and a dozen lawmakers who supported last fall’s free trade agreements with South Korea, Colombia and Panama.

“President Obama is facing a growing chorus of opposition to what his trade negotiators are up to on the TPP from his base and from other Democratic elected officials, and given that his campaign seems to be honing in on job offshoring as a winning theme, he needs to redirect his negotiators from their current TPP agenda of NAFTA-on-steroids with all of Asia,” said Wallach.  

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Can you say "Déjà vu" in Spanish?

Dear Neighbor:

Congratulations on your inclusion in the elite group of states that are currently negotiating the Trans-Pacific Partnership (TPP) Agreement! Your acceptance into this proposed “historic, 21^st century trade agreement” means that much of the “burden” of making laws and regulations for your nation will be taken off of you. No worries; lobbyists for Hollywood and American pharmaceutical companies and more than 600 official “corporate trade advisers” to the Office of United States Trade Representative (USTR) will help take care of the details.

Sorry to mention it, but we’re afraid many of your laws pertaining to intellectual property (IP), affecting issues from Internet privacy to access to affordable medications, might need a little “tweaking” to ensure they comply with the specifications of U.S. corporate “advisers.” The USTR’s demands at the TPP negotiations read like a wish list from the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Recording Industry Association of America (RIAA), and YOU have the opportunity to grant all their wishes.

You see, the condition the U.S. imposed for Mexico to get a seat at this corporate banquet was that Mexico agree to accept everything that the other countries already have negotiated over the past three years. Sure, NAFTA required some nasty changes to your IP laws. Remember the millions your government wasted trying to lift the U.S. patent on common yellow beans that a bio-prospector filed after NAFTA? Well, wait until you get a look at the 21^st century NAFTA on steroids!

As a part of the “historic” TPP negotiations, it is time for your laws to truly reflect your new “21^st century” status. For instance, you need to expand pharmaceutical patent protection and create new pharmaceutical monopolies in Mexico. You also need to extend copyright protection to device memory buffers and criminalize circumvention of technological protection measures, limiting fair and educational uses of all kinds of literary and artistic content. Overall, you are expected to introduce new, draconian provisions into Mexican law to lengthen, strengthen and broaden IP monopolies in Mexico.

The strict IP enforcement in this scenario may seem very familiar to you. In fact, you fought off a very similar – although less extreme – attack on your privacy and rights on the Internet in 2011 in the form of the Anti-Counterfeiting Trade Agreement (ACTA). Some objections to ACTA expressed by Mexico Senator Carlos Sotelo Garcia in September 2010 included the opaque nature of the ACTA negotiations, stringent IP enforcement measures (championed by the U.S.), and the “erosion” of access to information technology for approximately thirty million Mexican citizens.

A look at any current media coverage of the TPP will reveal a scene that is eerily familiar and equally concerning. Sorry to break the news, but the opacity of the TPP negotiations makes the ACTA process look like a pinnacle of open government. The TPP has been negotiated entirely in secret, with the only glimpse of the text coming from leaks of the IP, investment and other chapters. Furthermore, each of the negotiating nations has agreed to keep all documents besides the finalized text a secret for four years following the conclusion of negotiations, whether it is ever finalized or not. So whereas the same report by Senator Garcia implemented a working group to review the provisions of ACTA, no such legislative oversight would be possible in the TPP. Apparently the only way to get a look at the “21^st century agreement” – even for legislators of the countries in the negotiations – is to introduce a resolution demanding they be allowed to see how trade negotiators are rewriting a nation’s laws. In the U.S, the chairman of the Senate committee with official jurisdiction over TPP, U.S. Sen. Ron Wyden (D-Ore.), has done just that. Yup, the chairman of the Senate Finance Subcommittee on International Trade, Customs, and Global Competitiveness and his staff were explicitly refused access to even the U.S. negotiators’ proposal to the TPP negotiations.

The legislature of Mexico has already expressed its opinion of trade agreements that restrict privacy and rights on the Internet. On June 21, 2011, the Mexican Congress passed a resolution that urged that the Federal Executive not become a signatory of ACTA:

The Standing Committee of the H. Congress, respectfully urges the Federal Executive Power to, within the framework of its powers, instruct the ministries and agencies involved in negotiating the Anti-Counterfeiting Trade Agreement (ACTA), not to sign the Treaty.

Reading this sort of language coming from the national legislature of a sovereign nation, one might draw the conclusion that ACTA is doomed in that country. But foreign corporate interests have found another foothold in the laws of Mexico – in the form of the TPP. You may have believed that ACTA was dead in Mexico, but, like el chupacabras, it is rising again and this time it is even stronger.

Welcome to the 21^st century, dear neighbor.

 

Follow Public Citizen's Global Access to Medicines on Twitter: https://twitter.com/#!/PCMedsAccess
Read more at our webpage: http://citizen.org/Page.aspx?pid=4955

Just Relax, Canada. U.S. Pharma Will Handle It

Dear Fellow Canadians:

Welcome to the Trans-Pacific Partnership (TPP) negotiations! Since you are fresh off a bruising fight getting provisions that protect Internet freedom and privacy into Canada’s copyright Bill C-11, I’m sure that you are exhausted with defending your rights. Take heart. With the TPP, you will not have much of a say on laws or policies threatening your privacy, rights on the Internet or access to affordable medicines. Instead, lobbyists from major American industries and some 600 “corporate trade advisers” have helped lay out some of what the Office of the United States Trade Representative (USTR) expects from you.

These are the same industries that forced major concessions on C-11’s approach to digital locks despite near-universal criticism. Hundreds of pages of new non-trade policy contained in the most sweeping “free trade agreement” could face a mere up or down vote in the House of Commons. And the USTR proposes intellectual property provisions that cover dramatically more than copyright law. They touch a wide range of IP issues.

You thought NAFTA was a pill? Sure, Big PhRMA used NAFTA to attack our drug formulary system and all of those compulsory licenses for affordable meds. But back then, our government drew a line. Despite some considerable hysteria from the U.S. drug industry giants, you did not give away all of our policy space. This time, however, the TPP gives Prime Minister Stephen Harper a way to write all of us a real prescription for high drug prices and cement his view of Canada as an extended playground for corporate America.

Here are some of the highlights of the U.S. proposed IP chapter:

• Expand patent evergreening and create new pharmaceutical monopolies, raising medicine costs;

• Dramatically increase the life of a copyright term from 50 years in most cases under C-11 to 95 years;

• Increase penalties for circumvention and reduce the exceptions for individuals; and

• Establish an American-style notice-and-take down system for online copyright infringement.

This seems like a lot. If you were worried, however, that we had some duty to at least read the proposals for the law and voice our democratic concern, fear not. Negotiators act in secret. The only glimpse of the actual agreement so far has come from leaked copies of the text from the IP, Investment and other chapters. Remember in the good old days of ACTA when the University of Ottawa filed an access-to-information request but received a blacked out document with only the title visible? Expect similar treatment during TPP negotiations. While lobbyists and corporate liaisons are granted electronic access to the agreement, your parliamentary representative might have to walk down to the Department of Foreign Affairs and International Trade to speak personally with The Honourable Ed Fast P.C. , M.P., Minister of International Trade.

Moreover, if you are distressed by the fact that our respectable Department of Trade will have lots of work reviewing all the work done so far once Canada’s negotiators get hold of these secret drafts, you will be relieved to hear that Canada has a lesser role in the negotiations. By coming late to the table, Canada has achieved a second-tier position. This status requires Canada to agree to all the settled chapters, which its officials have not even read, and Canada cannot veto current provisions. Thus, not even lobbyists or the trade minister need concern themselves with settled provisions. The TPP negotiations shut individual citizens and even members of parliament and ministers out of the process.

The public response to C-11 proved that civil engagement has made a difference on intellectual property issues in Canada. The people—frustrated, fearful and bedraggled—woke up to the oppressive measures of industry groups and fought hard. But this is far from the end. In upcoming years, we might still witness the implementation of a multinational corporations’ wish list, which seeks to criminalize copyright infringement, implement ACTA-plus provisions and restrict Canadians’ access to affordable medicines. Through the TPP, the USTR seeks to achieve all these goals and more—without too much of a voice from us. Will we allow American industry to dictate to the Canadian people our rights—or stand up and demand that Canada step down from these negotiations?

Follow Public Citizen's Global Access to Medicines Program: https://twitter.com/#!/PCMedsAccess

James Cormie is a legal intern at Global Access to Medicines Program.  Originally from Edmonton, Alberta, James blogs on issues of trade, IP, and international law.

TPP Chiefs Raise Doubts about USTR’s Corporate IP Wish List

At the May 13th stakeholder briefing of the Trans-Pacific Partnership (TPP) trade talks outside Dallas, at least six countries' Chief Negotiators began to openly distance themselves from the Office of the United States Trade Representative (USTR), particularly from USTR’s radical intellectual property (IP) proposals, which would expand the scope and duration of pharmaceutical monopolies and challenge internet freedom.

In the past, these stakeholder briefings have felt like exercises in the art of saying little. USTR has sought to keep all nine countries on a common, limited message. But perhaps USTR can only push other countries and the public so far.

Early in the session, I asked the Chiefs:

The past year has witnessed the rise of an internet freedom social movement, with more than 3 million people petitioning the US Congress to block SOPA [the Stop Online Piracy Act] and tens of thousands protesting in the streets across Europe to shut down ACTA [the Anti-Counterfeiting Trade Agreement]. I think in Poland, these may have been the largest demonstrations since the Solidarity movement. Even Germany’s ministry of economic development is recommending against developing countries signing ACTA. Given that you are not releasing the TPP text, how will you assure people that the TPP will not pose similar problems?

Chile kicked things off, answering:

We are nine countries with many different positions—we are not all the same.

This may sound tame, but for those listening to the evolution of TPP sound bites, it was a surprisingly public distancing from USTR and its copyright and enforcement demands. And it set the pace for the day.

TPP = Corporate Power Tool of The 1 Percent

DALLAS- Tuesday, the Trans-Pacific Partnership (TPP) twelfth round of negotiations will begin behind closed doors at the Intercontinental Hotel here. Branded as a "trade deal" by its corporate proponents, the TPP in reality would establish new corporate rights to ease job offshoring, attack environmental and health laws in foreign tribunals and extend medicine patents. Its expansive non-trade provisions would impose constraints on government regulation of financial firms, food safety and more. As the Huffington Post's Zach Carter reported, the TPP would even ban "Buy America" procurement policy.

The TPP also includes aspects of SOPA, the controversial Stop Online Piracy Act. The pact would even elevate corporations to equal status with signatory governments allowing them to privately enforce their new rights be suing government in foreign tribunals to demand taxpayer compensation for policies that undermine the companies' expected future profits. Intensive negotiations have been underway for two years under conditions of extreme secrecy. More than 600 hundred corporate "advisors" have access to the draft texts while the press, public and Congress are shut out. This comic video, set to a parody tune based of the Jackson Five's ABC, aims to pierce the dangerous lack of public awareness about this audacious corporate power grab. With funny animation and a sarcastic tone, it highlights that the TPP is "all about secrecy" and has "nothing to do with trade you see". You can learn more about the TPP at www.TPP2012.com

Members of Congress Urge Obama to Stop the TPP from Banning Buy American

Here is the text of the letter:

Dear President Obama,

 We write in strong support of Buy American procurement policies, including the various federal programs that have been in place since the enactment of the Buy American Act in 1933 and passage by many states of similar preference policies.  We are concerned about proposals we understand are under consideration in the Trans-Pacific Partnership (TPP) agreement negotiations that could significantly limit Buy American provisions and as a result adversely impact American jobs, workers, and manufacturers.

Under the proposed TPP framework, individual states and the federal government would be obligated to bring existing and future domestic policies into compliance with norms set forth in 26 proposed TPP chapters, including one covering government procurement policy.  Failure to conform our domestic policies to these terms would subject the United States (U.S.) government to lawsuits before international dispute resolution tribunals empowered to authorize trade sanctions against the U.S. until our policies are changed.

In the past, U.S. Free Trade Agreements (FTA) required that all firms operating in a signatory country be provided equal access as domestic firms to U.S. government procurement contracts over a certain dollar threshold.  To implement this “national treatment” requirement, the U.S. waived Buy American procurement policies for firms operating in FTA-signatory countries. Effectively, in exchange for opportunities for some U.S. firms to bid on contracts in smaller foreign procurement markets, we traded away an important policy tool that can ensure that billions in U.S. government expenditures are recycled into our economy to create jobs, strengthen our manufacturing sector, and foster our own new cutting-edge industries.

We do not believe this approach is in the best interest of U.S. manufacturers and U.S. workers. Of special concern is the prospect that firms established in TPP countries, such as the many Chinese firms in Vietnam, could obtain waivers from Buy American policies.  This could result in large sums of U.S. tax dollars being invested to strengthen other countries’ manufacturing sectors, rather than our own.  At a time when U.S. manufacturing only employs 11.71 million people, a 40% decline from its peak in 1979 and the lowest since 1941, we simply cannot allow this to happen. 

As you know, procurement policy established in trade agreements cannot be later modified without consent of all signatory countries.  This would deprive Congress and U.S. state legislatures of their authority to modify procurement policies despite fundamentally changed national or international circumstances.  Therefore, we are writing to inquire about U.S. negotiators’ procurement proposals for the TPP and to encourage your Administration not to provide “national treatment” for U.S. government procurement.  This matter is of considerable urgency given the stated goal of completing these talks this summer and the special TPP intercessional negotiations on procurement held early last month.

 While we may have different views on other aspects of the prospective TPP, we are united in our belief that American trade agreements should not limit the ability of Congress and U.S. state legislatures to determine what procurement policies are in our national interest.  Thank you for your consideration of our views, and we look forward to your response on this important matter.

 

Sincerely,

Donna F. Edwards                                                                Nick J. Rahall, II

Member of Congress                                                      Member of Congress

 

 cc: The Honorable Ron Kirk, United States Trade Representative

Statement in Response to Obama’s Implementation of Colombia Free Trade Agreement (FTA)

Statement of Lori Wallach, director of Public Citizen’s Global trade Watch:

Given the number of unionists murdered in Colombia has increased every year since the trade deal was signed and the same labor violations that led candidate Obama to oppose the deal remain it is obscene that he has certified that conditions have improved and thus the trade deal is ready to go into effect. Since 1986 nearly 3,000 union activists have been killed in the country, the rate jumped to 48 last year.

Obama’s actions kill any leverage the U.S. had to stop the violence against union organizers and sends the wrong message about the human rights situation in Colombia which makes this so-called “trade deal,” which is really nothing more than special perks for big business that will harm most people in both countries, doubly damaging.

In 2008, candidate Obama made his opposition to the Colombia FTA clear, saying he opposed the deal, “because the violence against unions in Colombia would make a mockery of the very labor protections that we have insisted be included in these kinds of agreements.”  That violence has not stopped. Instead, President Obama has changed his position.

 The politics of Obama’s action with this trade deal are totally inexplicable given this is not just another NAFTA, which polling shows most American despise, but one with the country that is globally notorious for murdering unionists and a deal that was passionately despised by the very union voters on whom Obama will rely to win key swing states and volunteer for the vaunted Obama campaign ground game.

In 2008 candidate Obama also said, “I realize that changing your position to suit the politics of the moment might be smart campaign tactics but isn't the kind of strong, principled leadership America needs right now.” I am sure that after the President’s actions this weekend announcing that the same terrible labor conditions in Colombia are suddenly ok and pushing implementation of another NAFTA-style trade agreement leaves many Americans wishing that President Obama behaved more like candidate Obama.

The agreement allows corporations from anywhere around the world with offices in Colombia and the U.S. to challenge U.S. or Colombian public interest regulations and laws before a secret tribunal of three commercial lawyers to demand the laws are dumped and tax payer dollars are paid in compensation.

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More Tumult at the TPP: Secret Negotiations Against Internet Freedom Continue this Week in Chile; Big Pharma Allies Attempt to Shut Down Critics’ Event (Again)

Talks on the Trans-Pacific Partnership Agreement (TPP), which the U.S. is negotiating with Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam, are continuing this week (April 9-13) in Santiago, Chile in the form of an “intersessional meeting” on intellectual property (IP) – focusing on internet policy. The last time such a meeting was convened on IP in January in Hollywood, a stakeholder event organized by public interest groups in the same hotel as the negotiations was cancelled after the hotel received pressure from the Office of the United States Trade Representative (USTR). Simultaneously, USTR made sure the Motion Picture Association of America (MPAA) had access to negotiators, as they were given an exclusive tour of 20th Century Fox Studios guided by a representative of the studio’s government relations office.

USTR is clamping down on public participation to minimize the spread of information which challenges their hardline IP maximalist agenda. In addition to increasing reliance on intersessionals, like this week’s Santiago meeting, where stakeholders are not given a forum to participate, USTR has now effectively reduced stakeholder participation in the official negotiating rounds by eliminating their opportunity to give presentations to negotiators in an official forum. USTR’s response signals the substantial impact critics of the TPP are having. At the March negotiating round in Melbourne, one stakeholder presentation after another criticized USTR’s aggressive pro-Big Pharma patent proposal, filling most of the afternoon. Now TPP countries are resisting USTR demands that would imperil their access to medicines.

Cozy relationships with government aren’t the only way corporations are influencing these talks. This week, American University and the University of Chile arranged to host an event to present analyses critical of particular proposals in the TPP. These include leaked provisions that would greatly favor Big Pharma, expand drug monopolies and raise medicine prices. The keynote speaker was to be Senator Ricardo Lagos, a major political figure in Chile considered to be a possible candidate for the Presidency. Nevertheless, the public University of Chile law school canceled the event on less than two days’ notice, evidently on the advice of a member of the faculty who is a paid advisor of the multinational pharmaceutical companies’ association in Chile (the Cámara de Industria Farmacéutica, or CIF).

The cancellation sent organizers scrambling for a new venue, which they found in Chile’s Catholic University.

Stakeholders from a spectrum of communities concerned with the implications of the TPP are continuing to shine light on the negotiations. Criticism of the TPP process is mounting from members of both state and federal government in the United States. Internet activists in Chile are calling on their government to defend the rights of their citizens from what could be the next SOPA, while analyses from academic experts on IP show that the U.S.-proposed TPP provisions go beyond those seen in ACTA. Meanwhile, USTR claims that allowing 600 corporate advisors to examine the negotiating text, including representatives of the Recording Industry Association of America (RIAA) and the Entertainment Software Association (ESA), while keeping it hidden from the general public justifies their claim of “unprecedented” transparency in the negotiations.

SOPA proved that the netroots can beat IP maximalism and rulemakings from Washington designed to curb internet freedom, while the populist response to ACTA has shown that policy laundering attempts by industry and their allies in government will face serious resistance. Ambitious, secret economic agreements have been defeated before through public awareness and organizing. Now it’s time to stand up and tell our governments we will not stand idly by while our rights are under siege.

U.S. Abandons Final Pretense of Transparency or Inclusion of Consumer, Health, Environmental, Labor Perspective in Trans-Pacific Partnership (TPP) Talks

WASHINGTON D.C. – U.S. trade officials have quietly cut stakeholder presentations from the next set of Trans-Pacific Partnership (TPP) agreement negotiations, eliminating the last pretense that the process of the talks is transparent and inclusive and sending a message that only the views of the 600 official corporate trade advisors provided special access to the talks will be reflected in the final deal, Public Citizen said today. At previous TPP negotiating rounds, a day was set aside for civil society groups and others with concerns about the TPP to make presentations to negotiators.

“The message is clear: From now on, not only will the talks remain behind closed doors, but all pretense of consideration of consumer safety, health, environmental or labor concerns has been thrown out in favor of ensuring that the damning record of past U.S. trade pacts use of the same terms being pushed by the U.S. for TPP are not brought into the discussion,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

“The stakeholder presentations were the last vestige of transparency in these TPP talks,” Wallach said. “Many negotiators from other countries have told me that the stakeholder process was very valuable because it provided detailed information on the problems caused by past U.S. trade agreements (and on how they have actually worked) that was not generally available and certainly not being shared by U.S. negotiators, who generally have promoted positions promoted by industry interests.”

                Indeed, the U.S. Chamber of Commerce recently noted on its website that it had “led the business community’s advocacy for U.S. negotiators to include strong disciplines in the TPP trade agreement on intellectual property and path-breaking new rules on regulatory coherence, due process in antitrust enforcement and state-owned enterprises. In these and other areas, U.S. negotiators have proposed negotiating text that hews close to the chamber’s recommendations.”

Public Citizen earlier this month joined with other public interest groups from the nine TPP countries to demand that the draft TPP text be released. Negotiating texts for past deals have been released, such as for the Free Trade Area of the Americas in 2001. Currently, more than 600 official corporate trade advisors have access – to which the press and public are denied. Indeed, TPP countries signed an agreement in 2010 to not release negotiating texts until four years after a deal is completed or negotiations abandoned.

To date, U.S. Trade Representative (USTR) Ron Kirk has refused to release any draft TPP text, despite repeated calls from civil society groups for more than a year. U.S. Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee’s Subcommittee on Trade, has led congressional efforts to make the process more transparent. Wyden told Oregon Live, “When international accords, like ACTA, are conceived and constructed under a cloak of secrecy, it is hard to argue that they represent the broad interests of the general public.”

“USTR’s response to the request by civil society groups and Sen. Wyden to see draft texts of a massive agreement that will rewrite wide swaths of U.S. non-trade law has been to slam the door shut, instead of opening up the process and making it more transparent,” said Wallach.

The fallout from the U.S. decision already has begun. In response, New Zealand civil society groups have called on their government to “pull the plug” and walk away from the TPP talks. The TPP negotiations cover issues ranging from banning Buy America policies, to curbing Internet freedom, to providing offshoring incentives and special rights for corporations to attack U.S. laws in foreign tribunals.

“You can only assume that the TPP would not survive the light of day, and that is why the U.S. public is being denied access to details and now civil society groups are being sidelined,” Wallach said. “The Obama administration declares itself the most transparent administration ever, and President Barack Obama campaigned on transparency in government. It’s time he put those words into action.” The next round of TPP talks will take place May 8-18 at the InterContinental Dallas hotel in Addison, Texas.                                                               

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As Secretive Trade Negotiations Resume in LA, Public Interest Groups Demand Transparency

LOS ANGELES, Calif. — As trade negotiators from throughout the Pacific Rim meet in Los Angeles this week for talks aimed at moving the Trans-Pacific Partnership Free Trade Agreement (TPP) towards a rapid completion, labor, environmental and consumer advocates demanded that negotiating proposals be made available for public review and comment. 

“Americans deserve the right to know what U.S. negotiators have been proposing in our names,” said Tim Robertson, director of the California Fair Trade Coalition.  “This is the third year of serious negotiations on a pact that’s supposed set the standard for international trade and investment across the globe.  It’s outrageous that the public hasn’t been told what our representatives are negotiating for and what domestic policies they are giving away.”

The TPP is soon entering its twelfth major round of negotiations between the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam, and is explicitly intended as a “docking agreement” that other nations will join over time.  Canada, Japan and Mexico have already indicated their interest in doing so.  U.S. negotiators are pushing for the completion of the TPP negotiations this year. 

The U.S. has reportedly introduced text for most, if not all, of an estimated 26 separate TPP chapters covering everything from our environment to financial regulations, drug patents to public procurement.  While approximately 600 corporate lobbyists and a handful of others have been given “cleared advisor” status enabling them to review and comment on these proposals, the general public has not been allowed to do so.  This is a far less transparent negotiating process than many other international agreements, including those at the World Trade Organization, where draft negotiating texts are published online. 

“On the table in these talks are critical issues related to the rights of workers, climate change, biodiversity and our global economy.  It is crucially important that there is transparency around what is being negotiated and time for open debate and public participation,” said Ilana Solomon, trade representative with the Sierra Club.

TPP negotiations in Los Angeles are occurring from April 1 to 4 on labor, environmental and government procurement provisions.  What information is available on U.S. proposals comes primarily from a small handful of leaked documents and conversations with negotiators from other countries. 

“If U.S. negotiators get their way, the public will be barred from reviewing any proposals until the negotiations are over, at which point it will be virtually impossible to make any substantive changes,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.  “That’s a bad way of making public policy, to say the least.  Frankly, it reinforces the worst public perceptions about government working behind-closed-doors with moneyed interests at the expense of the general public.” 

                                                        ###

Investor-State Arbitration Strikes Again, Now in Argentina

Today the Obama administration announced that it would remove Argentina from the list of countries that receive certain trade preferences. The administration claims that Argentina has not complied with a orders from World Bank tribunals to hand over the about $300 million in cash to two foreign investors, so its trade prefrences had to be revoked. Did Argentina steal the investors' assets in a Cuban-style expropriation? No. Argentina was merely trying to conduct some reasonable policies in the spheres of water utility management and macroeconomic policy when these companies filed cases under the investor-state lawsuit provisions of the U.S.-Argentina Bilateral Investment Treaty (BIT). The two companies, Azurix and CMS Gas Transmission Company, argued that Argentina's regulations infringed on their profit rights, and the arbitration panels agreed.

Azurix's case against Argentina stemmed from the sky-high prices the company charged for water when it took over a newly-privatized water utility. When the Argentine government sought to bring the prices back into the range of affordability in 1999, Azurix tried to escape the regulations by filing a case under the BIT. It eventually won over $165 million through this tactic, but the company has so far refused to collect its claim in Argentine courts as required by Argentine law.

CMS Gas Transmission Company sued Argentina on the basis of its foreign exchange and capital control policies in the wake of the meltdown of the peso-to-dollar peg in 2001. Apparently, Argentina can't even run its macroeconomic policy without being second-guessed (and sued) by a foreign investor. Citizens of Argentina had to endure the rocky domestic economy for a few years while Argentina got back on its feet, but CMS Gas Transmission Company used the BIT to get special treatment and the arbitration panel ordered Argentina to pay over $133 million. (CMS later sold the arbitration case to Blue Ridge Investment, a Bank of America subsidiary, thereby broadening the horizons of the financialization of everything.)

Multinational corporations would love to expand this investor-state system that places investor profits above sound public policy. They may get their wish if the Trans-Pacific Partnership (TPP) “free trade” agreement were to go into effect. As of now, the U.S., Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam are participating in the TPP talks, but Japan could join soon. Importantly, the investor-state system works both ways: U.S. regulations would be under threat just as much as regulations of the other TPP countries would be under threat.

The case of Argentina just underlines the fact that the investor-state system enables a two-track system of justice in which foreign investor rights are perfectly enforceable, but the rights of citizens are not. As we have discussed on this blog recently, Chevron is using the investor-state system to avoid paying a court award of $18 billion for punitive damages and cleanup for its huge oil spills in the Ecuadorean Amazon. The Obama administration should be focused on rolling back this system instead of expanding it under the TPP.

Global Trade Watch's Director Lori Wallach in the Huffington Post

Trade Deals: Backdoor Financial Deregulation

Wall Street has a new power tool to demolish financial stability policies, and it comes from a source many would not expect. It's not the cozy relationship between Wall Street and some members of Congress, or the hordes of bankster lobbyists who roam Capitol Hill. Wall Street has obtained and is now pushing for more powers to challenge U.S. and other nations' financial regulations via the international agreements that it has sold to a skeptical American public under the appealing brand of export-expanding "free trade" deals.

In Sunday's New York Times, Gretchen Morgenson described how the financial provisions of the World Trade Organization (WTO) and NAFTA (the North American Free Trade Agreement) operate as backdoor deregulation instruments. Those of us who have studied these so-called "trade deals" understand that these agreements have very little to do with trade per se. Rather, they mainly include new rights for corporations and new constraints on governments' non-trade regulatory policy space.

As my piece in a special edition of the American Prospect shows, instead of following through on President Obama's campaign commitments to fix this backdoor corporate power grab, now the administration is rushing to massively expand this mess by completing a Trans-Pacific Partnership (TPP) deal now being negotiated behind closed doors with eight Pacific Rim nations.

To read the rest of the article click here or go to http://huff.to/GHOXUd

Global Trade Watch's Director Lori Wallach in The American Prospect

PACIFIC ILLUSIONS: NEW REPORT EXPOSES TRANS-PACIFIC PARTNERSHIP SHORTCOMINGS, AS OBAMA PRESSES AHEAD

 Washington, DC -- Today, President Obama will announce plans to escalate the administration's trade offensive against China. This follows the administration's pattern of taking a hard line on narrow issues, while at the same time working to finalize a much more consequential grand-bargain with the region: the Trans-Pacific Partnership (TPP). As Obama’s main trade and diplomatic thrust in the Pacific, the TPP is meant to revive the U.S. export economy and counter Chinese influence. In reality, it does neither. 

Pacific Illusions, a new special report by The American Prospect, examines why the TPP appears doomed to repeat the failures of previous free-trade agreements. 

Read Pacific Illusions online: http://bit.ly/AxMS2R

Pacific Illusions shows how the TPP fails on trade because it doesn’t address the most important issues: currency manipulation, trade with state-owned companies, investment subsidies to induce off-shoring, and the asymmetry between the mercantilist policies and practices of much of Asia and the free trade regime of the United States. 

Contributors and issues covered include:

-- Clyde Prestowitz, President of the Economic Strategy Institute, explains why the TPP will undercut the U.S. strategic position in "The Pacific Pivot."

 

-- Jeff Faux, founder of the Economic Policy Institute and now its distinguished fellow, analyzes how the deal will accelerate offshoring and drive down wages, in "The Myth of the Level Playing Field."

-- Lori Wallach, director of Public Citizen’s Global Trade Watch, argues that the provisions of the proposed deal and its secretive negotiations amount to a covert attack on regulation, in "A Stealth Attack on Democratic Governance."

-- Kevin P. Gallagher, associate professor of international relations at Boston University and senior researcher at the Global Development and Environment Institute, Tufts University describes how the damage won't be limited to the U.S., as the economies of smaller Asian countries will also take a hit, in "Not A Great Deal For Asia."

-- Merrill Goozner, senior correspondent for The Fiscal Times, takes a look at how U.S.-based solar and microchip industries will be harmed the agreement; Harold Meyerson, editor-at-large at The American Prospect, addresses the negative impact on auto and steel manufacturing. 

 

Don't Let the TPP Prohibit Capital Controls, Say 100 Economists

+++ Joint press release of the Global Development and Environment Institute and the Institute for Policy Studies +++

In advance of Trans-Pacific trade talks, over 100 economists are sending a letter today urging negotiators to promote global financial stability by allowing the use of capital controls.

Signatories include prominent scholars from six of the nine countries currently involved in the Trans-Pacific talks:  Australia, Chile, Malaysia, Peru, New Zealand, and the United States. The other participating countries are Brunei, Singapore, and Vietnam. Trade officials will meet March 1-9 in Melbourne, Australia for the 11th round of negotiations.  Click here for the full statement and list of endorsers.

The economist statement reflects growing consensus that capital controls are legitimate policy tools.  It notes, however, that nearly all U.S. trade agreements “strictly limit the ability of trading partners to deploy capital controls – with no safeguards for times of crisis.”

They recommend that the Trans-Pacific Partnership agreement “permit governments to deploy capital controls without being subject to investor lawsuits, as part of a broader menu of policy options to prevent and mitigate financial crises.”

Will Chevron case take down trade pact investor-state system?

After having lost on the merits in Ecuador and U.S. courts, Chevron has turned to an ad hoc “investor-state” tribunal of three private lawyers to help the company avoid paying to clean up horrific contamination in the Amazonian rainforest.

Chevron is trying to get this private tribunal to suspend enforcement of or alter an $18 billion judgment against Chevron rendered by a sovereign country’s court system. The closed-door tribunal will meet in a rented room in Washington, DC Saturday and Sunday (February 11-12).

These unaccountable panels, from which no outside appeal is available, have issued perverse rulings in the past on behalf of corporate claimants. Recent U.S. trade agreements empower foreign corporations to use this system to skirt our domestic courts to directly use our government before these corporate tribunals to obtain payment of unlimited taxpayer funds when they claim domestic environmental, land use, health and other laws undermine their “expected future profits.” Really! This is becoming one of the most controversial issues in the first “trade” deal the Obama administration is negotiating - a new Trans-Pacific Free Trade Agreement (FTA).

Public Citizen, Amazon Watch and the Rainforest Action Network are standing up to Chevron's kangaroo court by organizing a rally and conducting a Teach-In at American University about Chevron's attempt to use the investor-state system to evade justice. They also will be conducting a press briefing. You are invited to attend all events.

Election 2012: the Candidates on Trade

(Disclaimer: Public Citizen has no preference among candidates for office.)

With the budget and other scandals dominating political discourse, little space has remained for discussion of trade policy among possible presidential candidates.

To fill this void we decided to examine exactly where the politicians fall on key trade issues:

Bachmann
Although foreign policy hasn’t always been her strong suit, Rep. Michele Bachmann (R-Minn.) is pretty confident about her views on trade. Bachmann interrupted her presidential campaign and broke a streak of 88 absences to cast a vote in favor of the free trade deals with Korea, Colombia and Panama. In a press release she writes that these deals will “spur economic growth… without cost to taxpayers.” Notably, the representative voted against Trade Adjustment Assistance, which would provide support for workers displaced by the deals. Bachmann also voted against Fast Track cancellation in 2008 and in favor of the Peru trade deal in 2007.

In a blog post urging lawmakers to pass the Korea, Colombia and Panama trade deals, Bachmann writes that the “role of free trade as an expression of liberty….signifies the very principles our country was founded upon.” Unfortunately, these trade deals were negotiated under Fast Track, leaving Congress no authority to amend the agreements. (The constitution, or the document our country was actually founded upon, outlines a system of checks and balances granting Congress the power to “regulate commerce with foreign nations”).

Paul
A self-proclaimed proponent of free trade in its most pure form, Rep. Ron Paul (R-Tex.) opposes NAFTA-style trade deals because they erode U.S. sovereignty and are unconstitutional. He has voted against almost every trade deal that has surfaced during his tenure in office, including Peru, Oman, Bahrain, CAFTA, Australia, Singapore and Chile. Paul has also been an advocate of withdrawing from the World Trade Organization.

Job-Killing Trade Deals Pass Congress Amidst Record Democratic Opposition

Obama and Tea Party Flip Flop on Fair Trade Campaign Commitments

Statement of Lori Wallach, Director of Public Citizen’s Global Trade Watch

With nine percent unemployment and Americans desperate for job creation, it is unconscionable that President Obama and House Republicans would push through a trio of NAFTA-style job-killing trade agreements that even the government’s own studies show will increase the U.S. trade deficit.

This represents a complete flip-flop for President Obama, who won crucial swing states by pledging to overhaul our flawed trade policies. So it is no surprise that a sizeable majority of Democrats in Congress voted against these agreements, against Obama and for American jobs.

Today a larger share of House Democrats voted against a Democratic president on trade than ever before. It took Bill Clinton nearly eight years of NAFTA job losses, sell outs and scandals to have nearly two-thirds of the House Democrats vote against him on trade.

Given the strong Democratic opposition, ultimately it was the Tea Party GOP freshmen who passed these job-killing deals despite their campaign commitments at home to stand up for Main Street businesses, against more job offshoring and for Buy American requirements. The three pacts explicitly ban Buy America procurement policies. The Korea FTA is projected to increase the trade deficit, with seven U.S. industrial sectors hardest hit and job losses of 159,000 in its first seven years.

Members of Congress that voted for these job-killing agreements – backed by Wall Street and America’s most notorious job-offshoring corporations and harmful to American workers, small business and consumers – will face a reckoning as the damage of these pacts hits home. We promise to closely track and publicize every development.

Everyone is asking what the Obama administration could have been thinking to push the sorts of NAFTA-style trade deals that polls show majorities of Democrats, Independents and even GOP voters oppose as job killers, especially after the lesson of the 1993 NAFTA vote, when a Democratic president’s blurring of the distinctions between the parties on trade and jobs caused a disgruntled base to stay home. 

Every election cycle, more Democrats and GOP are campaigning against these sorts of NAFTA-style trade pacts. Given this and the high unemployment rate, it will be very rough for those officials who then betrayed folks at home and voted for these deals loved only by Wall Street and job-offshoring corporations.

Record of Congressional Democratic Opposition to Democratic Presidents on Trade Pacts

- 82.3% of House Democrats opposed the Colombia FTA (158 Democrats against, 31 for)

- 67.7% of House Democrats opposed the Korea FTA  (130 Democrats against, 59 for)

- 64.1% of House Democrats opposed the Panama FTA (123 Democrats against, 66 for)

- 60.6% of Democrats opposed NAFTA (1993)

- 35% opposed the WTO (1994)

- 65.56% opposed China PNTR (2000)

 

Record of Congressional Democratic Opposition to GOP Presidents on Trade Pacts

- 62.6% opposed the Chile FTA (2003)

- 62.14% opposed the Singapore FTA (2003)

- 41.3% opposed the Australia FTA (2004)

- 39.32% opposed the Morocco FTA (2004)

- 92.6% opposed the Central America Free Trade Agreement (2005)

- 40.4% opposed the Bahrain FTA (2005)

- 87.6% opposed the Oman FTA (2006)

- slightly more than half opposed the Peru FTA (2007)

Trade disaster: Congress votes tomorrow

A message from Lori Wallach, Director of Public Citizen's Global Trade Watch

You don't hear from me often. Over the past year, I have spend most of my time on Capitol Hill, meeting with members of Congress, educating them about our current flawed trade policy and how we can create a trade model that works.

I have been working to get a majority on Congress to say NO to the three devastating NAFTA-style trade deals signed by Pres. Bush that now Pres. Obama is trying to ram through Congress.

But today, I urgently need a favor from you. It will take about five minutes. Congress will vote on these job-killing, unsafe-import-flooding deals on Wednesday. I need you to pick up the phone and call 1-800-718-1008 right now to stop the three unfair trade deals with Korea, Colombia, and Panama.

Take 5 minutes to save jobs. Dial 1-800-718-1008 and tell your Representative to vote NO on all three flawed trade deals.

Here’s why:

• The Korea trade deal is the largest offshoring deal of its kind since NAFTA. If approved, the deal will displace 159,000 American jobs in the first seven years. Even the official U.S. government study on the Korea pact says that it would increase our trade deficit, and it hits the "jobs of the future” sectors hardest – solar, high speed trains, computers. [Learn more]
• We should have never even discussed a new trade deal with Colombia, the world capital for violence against workers. More unionists are assassinated every year than in the rest of the world combined. In 2010, 51 trade unionists were assassinated. Do you think we would consider a trade deal with a county where 51 CEOS were murdered? So far in 2011, another 22 have been killed, despite Colombia’s heralded new "Labor Action Plan.” [Learn more]
• The Panama agreement has many of the same problems as the other two deals -- undercutting the reregulation of the big banks and speculators who destroyed our economy and empowering foreign investors to attack U.S. health, safety, labor and environmental laws before foreign tribunals. But, Panama is also one of the world’s largest tax havens. There, rich U.S. individuals and over 400,000 corporations take advantage of the offshore financial center, many dodging paying the taxes our communities desperately need. This FTA would undercut our current tools to fight tax dodging and money laundering. [Learn more]

Stop the trade deals that replicate the failed policies of the past. Call your Representative today.

Behind the scenes and throughout the country, our team has done everything we can do to try and get through to the leaders in Congress to stop these trade agreements. But it looks like many of our leaders in Washington—both Democrats and Republicans—are siding with corporate lobbyists instead of learning from the experience of working Americans.

YOU know the reality of these trade deals better than corporate lobbyists—and Congress needs to listen to you.

Please call 1-800-718-1008 right now.

Speak out with millions of Americans against the job-killing trade deals that only reward fat cats, off-shore our jobs and undermine our environmental and financial stability safeguards.

Lori Wallach on HuffPo: "Trade Pacts Obama's Flacking in Jobs Plan Would Increase Trade Deficit Say Government Studies"

Check out Lori Wallach's latest piece on the Huffington Post.

 

Trade Pacts Obama's Flacking in Jobs Plan Would Increase Trade Deficit Say Government Studies

Everyone expects Obama's imminent jobs plan and related speeches to include a pitch to pass Bush's leftover Free Trade Agreements (FTA) with Korea, Colombia and Panama. ... Problem is, whatever one thinks about the idea of "free trade," the federal government's own studies predict that these three deals would increase the U.S. trade deficit. Higher deficits mean more jobs will be displaced by imports than are created by exports. This was a critical factoid largely missed by reporters covering Obama's speeches after the debt ceiling deal -- with many stories simply repeating Obama's claim that these FTAs were vote-ready job-creators for Congress to take up ASAP."

Read the entire piece at the Huffington Post to find out what you need to know about the trade aspects of Obama's jobs plan.

Unlike Budget Debate, Basic Math Error on Trade Continues to Go Unchallenged

The Obama administration spent much energy over the weekend attempting to discredit Standard & Poor’s credit rating agency’s downgrade of U.S. debt, which they said was based on a “basic math error of significant consequence.”

In sum, the administration argued that S&P applied the Budget Control Act’s deficit reduction dollar amount of $2.1 trillion to a non-inflation adjusted baseline scenario, when that number was derived from a scenario where discretionary spending levels grew with nominal GDP. In 2021, government debt as a share of GDP would be 93 percent under S&P’s original methodology, while it would be 85 percent under what Treasury maintains is the correct methodology. This claim of an error has been all over the press for days.

It would sure be nice if the Treasury and press got as worked up about basic math errors that the White House itself is making on the three pending trade deals with Korea, Colombia and Panama.

The administration maintains that the Korea deal will boost U.S. exports by $11 billion, when in fact the administration’s own numbers within the U.S. International Trade Commission study show that the deal will lead to a decline in net exports of about $416 million. The S&P’s debt number overstated the debt by about nine percent, but the administration’s claim of exports under the Korea deal overstates the magnitude of the change in the trade balance by 25,000 percent, in addition to getting the direction of the change wrong. If, as the Treasury Department says, the S&P debt error was “of significant consequence,” the administration’s trade-deal export claims must qualify as a misstatement of colossal consequence.

Similarly, the administration says that U.S. exports will increase by $1 billion under the Colombia deal, when the administration’s own numbers show that net exports will take a $66 million hit under the deal. (No estimates have been provided for the U.S.-Panama deal.)

Why these discrepancies? In its public statements, the administration is selectively looking only at one side of the ledger, extracting a number for bilateral exports, while not accounting for the overall change (the change in exports minus imports under the deal). In budget economics, this would be akin to looking only at what the government is taking in as revenue, without looking at what the government is spending. If the government simply assumed away any government spending, I’m betting that the press would call them on this “basic math error of significant consequence.”

The administration is also selectively looking at just the change in U.S. exports to Korea and Colombia under the pacts. But as the administration’s own reports show, these deals will also induce changes in trade patterns with other countries. At the end of the day, the U.S. is projected to be importing more than it is exporting as a result of these deals.

It is newsworthy that the administration’s own reports (produced by the USITC) conclude that net exports will decline under the deal, especially since their primary public rationale for the deals is that exports will increase. These USITC reports in the past have tended to be wildly optimistic, such as underestimating the increase in the U.S.-China trade deficit after China entered the World Trade Organization by $166 billion. But, the reports have nonetheless always concluded that, even if bilateral deficits increase, the global U.S. balance will improve. That is, until the reports on the three pending deals, and the deal with Peru (negotiations on all four were concluded in 2007), predicted a worsening of the overall balance.

This fact was even trumpeted by no less of a champion of NAFTA-style deals than Sen. Chuck Grassley (R-Iowa), who said that the total net export number is the “the one number that is of significance to our economic health.” (See full quote below, after the jump.)

It is unclear why the press continues to report as fact (or unchallenged assertion) the claim that the pending trade pacts will create jobs. These claims rely on using the wrong trade numbers from the government’s own study. Unlike many complex economic debates, all these numbers are publicly available, very straightforward and involve reading no more than two pages in two reports to simply verify the administration’s claims (pages 2-14 and 2-15 of the Korea report and pages G-12 and G-13 of the Colombia report). Moreover, the administration’s basic math error has been known for over nine months, and communicated to reporters and their editors repeatedly over that time (see “Survey of Studies on Potential Economic Effects of the Korea FTA Show Rising Deficits and Job Losses”,  “Survey of Studies on Potential U.S. Economic Effects of Korea Trade Deal Shows Rising Deficits and Job Losses, 2010 ‘Supplemental Deal’ Does Not Alter These Outcomes”, “Guide to the the State of the Union on Jobs, Exports”, “Previewing Ways and Means Chair Camp’s Request for USITC Analysis of the December 2010 Korea FTA Supplemental Auto Deal”, “The Korea FTA is Lose-Lose for the U.S. and Korea: The Facts”, “Here’s an Impediment to Job Creation That Ways and Means Hearing Should Discuss: Korea Trade Deal Is Projected to Increase the Overall U.S. Trade Deficit”.

Reporters can and should quote advocates of these trade deals, and explore their reasoning for wanting Congress to pass them. But, to the extent that job and export claims are based on the administration’s basic math errors, this needs to be pointed out in reporting.

(For what it’s worth, there is also no historical support for the notion that NAFTA-style deals increase exports in relative terms. This would also cast doubts on the administration’s stated rationale for pushing the agreements. However, one would not even have to examine the record to report that the administration is misrepresenting its own research.)

Op-Ed Round-Up

Here's a round-up of some of the best opinion pieces over the last couple of months about the pending trade deals:

 

U.S.-Korea trade deal is bad for both countries

By Chun Jung-bae, National Assembly of the Republic of Korea

"There is some rosy fantasy that the pending U.S.-Korea Free Trade Agreement will create tens of thousands of well-paying jobs in both countries and strengthen and expand the U.S. relationship with Korea. This is a fabrication of multinational corporations that have no allegiance to either country. As a member of the Korean National Assembly, I would like to set the record straight: In reality, the deal is lose-lose."

Read the entire piece here.

 

 

Congress should reject proposed trade agreements and insist on better policies

By Lynne Dodson, secretary-treasurer of the Washington State Labor Council, and Kathleen Ridihalgh, senior organizing manager of the Sierra Club in Washington and Oregon.

"The definition of insanity is doing the same thing over and over and expecting a different outcome. This summer, insanity reigns over proposed U.S. trade agreements with South Korea, Colombia and Panama. For more than 20 years, "free" trade agreements have systematically undermined the American economy and the middle class. The growing disparity between the "haves" and "have nots" is turning the American dream into a nightmare. It is a direct result of our failed trade policy, and it needs to stop now."

Read the entire piece here.

 

US-Colombia free trade agreement bad idea for both countries

By John I. Laun and Cecilia Zarate-Laun, Colombia Support Network

"In the coming days, the U.S. Congress will be debating a free trade deal between the United States and Colombia. The agreement, if finalized, will have a negative impact on both countries. It will not lead to job creation in the United States. Instead, it will cost U.S. jobs, as multinationals will relocate to Colombia in order to avoid paying higher wages here. But Colombia will not benefit, either."

Read the entire piece here.

 

Trading Our Future: Tax Cheating and the Panama Free Trade Agreement

By Dylan Ratigan, host of MSNBC's "The Dylan Ratigan Show"

"If you want to know why politicians are so eager to pass a free trade agreement with Panama this month, type "Panama offshore banks" into Google and look at the paid ads. What you'll see is advertising by law firms and banks that will offer you help to set up a secret corporate structure in Panama immune from taxes."

Read the entire piece here.

 

Free Trade Pacts Will Cost Tennesseans Jobs

By Robert E. Scott, director of trade and manufacturing policy research at the Economic Policy Institute

"Based on past U.S. experience with NAFTA and other trade agreements, I have estimated that the U.S.-Korea and Colombia FTAs will displace 214,000 U.S. jobs. These job losses will fall hardest in industrial states like Tennessee. Workers there would be well-advised to think twice before supporting these job-displacing trade agreements."

Read the entire piece here.

  

 So-called 'free' trade agreements harm American workers

By Steve Kagen, doctor and former member of Congress from Appleton, Wis.

"Professional politicians in Washington and their partners on Wall Street are lining up for another payday - this time by promoting 'free trade' deals with Korea, Panama and Colombia. But if you're not in Washington or on Wall Street, there's a problem. These new deals are just like the old deals. They are job-killers - just like NAFTA and CAFTA before them."

Read the entire piece here.

 

 
 
Say no to new trade deals and start over

Editorial

"If so-called free trade is not done right...the only winners are corporations without borders. The losers are the people who live and work in those developing nations and the American blue-collar workers who see jobs leave the States. ... There is a good reason that both Maine tea party groups and organized labor oppose the South Korea, Panama and Colombia trade agreements. After defeating them, Congress must create a better way to promote global trade."

Read the entire piece here.

 

Open borders, trade deals are ruinous for America

By James P. Hoffa, president of the International Brotherhood of Teamsters

"Three more job-killing trade deals are in the hopper, and you can bet the news media will swallow whole the phony claims made about them by the U.S. Chamber of Commerce and other groups. Congress is now considering trade agreements with Colombia, where trade unionists are routinely murdered; Panama, a well-known tax haven; and South Korea, in the biggest trade deal since NAFTA. It seems our trade policy is of the corporation, by the corporation and for the corporation."

Read the entire piece here.

 

Trade deals are no deal for US

By Steven J. D'Amico, former Mass. state Representative and member of the American Jobs Alliance

"Even after losing 682,000 jobs to NAFTA since it took effect in 1994, and 2.4 million to China since it joined the World Trade Organization, Washington continues in its blind faith that somehow these trade deals are good for us. This summer Congress is expected to take up three new trade deals - with Korea, Panama, and Colombia. These trade pacts are bad for American workers, bad for our domestic economy, and bad for democracy."

Read the entire piece here.

 

 
Free-trade deals would be costly to U.S.

By Tom Burga, president of the Ohio AFL-CIO

"For over a decade, the labor movement and development advocates have called for fair-trade policy that is part of a more coordinated and coherent national economic strategy.  Unfortunately, the Korean, Colombian and Panamanian free-trade deals before Congress do not address the fundamental policy failures of the North American Free Trade Agreement and China's inclusion into "favored nation status," which has led to catastrophic job loss in the U.S. and the explosion of our import/export deficit, now reaching $500 billion annually."

Read the entire piece here.

 

 Trade pacts bad for California agriculture

By Curtis W. Ellis, executive director of the American Jobs Alliance, and Joaquin Contente, president of California Farmers Union 

"Pending free trade agreements with Korea, Colombia and Panama are bad for California farmers and must be rejected if we are to preserve our way of life. All three trade treaties are based on North American Free Trade Agreement-style policies that have displaced American farmers while sending jobs that support California's rural communities offshore. In fact our leading export is jobs and we reward companies that outsource jobs. Since NAFTA took effect, the United States has lost 300,000 farms and millions of jobs."

Read the entire piece here.

 

 
Wisconsin Farmers Union opposes free trade pact with Korea

By Darin Von Rudin, president of Wisconsin Farmers Union

"WFU strongly opposes the Korea-U.S. Free Trade Agreement and urges Congress to do the same. We feel our legislative leaders should be protecting and promoting American jobs, family farms and our rural communities through sound economic, environmental and labor policies. We don’t think this trade agreement adequately promotes these values."

Read the entire piece here.

 

 
Rep. Schrader is confused on international trade

By Steve Hughes, state director of the Oregon Working Families Party,Ray Kenny, International Brotherhood of Electrical Workers Local, and Frank Rouse, president of the Machinists Union Local 1005

"Congressman Kurt Schrader seems to be confused. On the one hand, he says he opposes trade deals that extend greater rights to foreign investors than exist for Oregonians doing business in our state. On the other hand, he is supporting a massive new free trade agreement with South Korea that does just that."

Read the entire piece here.

 

 
Free trade agreements jolt the economy, but not in a good way

By Jessica Lettween, director of the Minnesota Fair Trade Coalition

"It's easy to understand why multinationals adore the Korea agreement. But with around 7 percent unemployment in Minnesota, a budget crisis, and an electorate that is strongly opposed to more NAFTA-style trade agreements, it is baffling why any member of Congress would endorse a deal that will cost us so much."

Read the entire piece here.

 

Choose voters over donors on free trade

By Gordon Lafer, professor at the University of Oregon, former senior adviser to the U.S. House’s Labor Committee

"Like Republicans, the White House is eager to get these treaties done quickly, so that voters will have forgotten by the fall of 2012. To see the Obama administration and Republican leadership quietly collaborating to seal this deal in knowing violation of the voters’ will is among the most telling signs of corporate power in Washington, and among the most depressing stories in these tough times."

Read the entire piece here.

 

Obama's trade policy clearly shortsighted

By Karen Hansen-Kuhn, international program director for the Institute for Agriculture and Trade Policy

"More than two years into the Obama administration, we're still waiting for a 21st-century trade policy."

Read the entire piece here.

 

(Disclosure: Public Citizen has no preference among the candidates for public office.)

 

Trade Looms Large in NY Special Election

(Disclaimer: Public Citizen has no preference among candidates for office)

Yesterday Democrat Kathy Hochul pulled off an upset win against Republican Jane Corwin in the special election for New York's 26th District, wresting control of a seat the GOP has occupied since the 1960's. Much attention has focused on the candidates' positions on Medicare as a deciding factor in the race, but trade policy also played a key role in the election.

Jack Davis, independent candidate and president of a local manufacturing company, turned the spotlight on the devastating consequences of unfair trade policies for American manufacturing workers. His focus on offshoring garnered nine percent of the votes in the special election.

Earlier in the race, Davis was polling at 23 percent, a testament to the power of trade as an election issue.  Eager to be on the right side of the trade issue, Kathy Hochul released a strongly-worded statement condemning NAFTA and opposing the Korea, Panama, and Colombia FTAs.

For her part, Corwin ran an ad claiming that she would "oppose trade agreements that just aren’t fair", but never followed through in naming a specific pact that she would oppose. When asked point-blank in a questionnaire if she supported NAFTA and the Korea, Panama, and Colombia FTAs, she refused to take a position.  The tension between Corwin's vague fair trade statements and her reluctance to oppose specific policies came to a head when Hochul and Corwin addressed Davis' absence from the May 12th debate:

Oddly, Hochul and Corwin both ended up noting Davis’ absence from the debate not to needle him, but each other.

Hochul started it, saying she wished Davis had participated because “he brings a lot to the debate,” and on his behalf demanded Corwin state her view of the North American Free Trade Agreement and unfair trade. That’s been Davis’ signature issue in all four of his congressional campaigns.

Corwin’s answer: “Right back at’cha, Kathy. There are a lot of things that Jack could ask Kathy Hochul. I think we need to get clarification on her plan for Medicare. She talks about holding the line on taxes. How do you hold the line on taxes when you’re advocating ... to raise taxes?”

That exchange sharply contrasted the difference between Hochul's commitment to oppose specific trade agreements and Corwin's broad statements on fair trade. A large number of the new GOP House freshmen campaigned on supporting fair trade. With Hochul's solid win over Corwin, they're on notice that they will have to put their money where their mouths are on the upcoming votes on the Korea, Panama, and Colombia FTAs or face voter anger in November 2012.

Wisconsin, Korea, and the attack on working families

Working families are under attack by state legislatures nationwide - and the last thing we need is more anti-worker, job-killing trade policy at the federal level. But it looks like that's just what we'll get - unless we draw a line in the sand now and stop the Korea trade deal. It's time to fight back - and to raise fair globalization as part of our vision of a just and sustainable economy.

It's all part of the same problem. They cut taxes for corporations and let them write the rules of the global economy to shift production to where the taxes are the lowest, and worker rights and environmental protections are the weakest. When we don't have any tax revenue left because the corporations (and jobs) have left for overseas or blackmailed their way to criminally low tax rates, they try to balance budgets on the backs of working families. They cut essential services and are now even trying to take our rights. If jobs stayed here in the first place, we wouldn't' be in this mess.

It's what Leo Gerard of the Steelworkers union calls a "revenue problem". We can't let it go unchecked.
 
We need to fight back - and to raise the need for fair globalization policies as part of our vision of a just and sustainable economy where workers rights are upheld as sacred.

Two opportunities to hear Ha-Joon Chang in DC

Want to hear economic and trade policy issues discussed in an accesible and engaging manner? You can 
do little better than stopping by two events tonight and tomorrow in DC where Ha-Joon Chang is speaking on his new book 23 Things They Don't Tell You About Capitalism.

The first opportunity is tonight at 6:30 pm at Busboys and Poets on 14th St., NW, cosponsored by the Center for Economic and Policy Research page. The second opportunity is tomorrow at the New America Foundation at 12:15 pm.

Here's a little bit more about the book and Chang, from the promotional materials:

We may like or dislike capitalism, but surely we all know how it works. Right? Wrong. Today, most arguments about capitalism are dominated by free-market ideology and unfounded assumptions that parade as ‘facts’. With the help of the ‘Dead Presidents’ on the dollar bills, Walt Disney’s Rescuers, an Indian bus driver named Ram, and sheep-burning French farmers, Ha-Joon Chang’s new book, 23 Things They Don’t Tell You About Capitalism (Bloomsbury USA, January 2011), tell the story of capitalism as it is and shows how capitalism as we know it can be, and should be, made better.

About Ha-Joon Chang:

Ha-Joon Chang teaches in the Faculty of Economics at the University of Cambridge. His books include the international bestseller Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism and Kicking Away the Ladder, winner of the 2003 Myrdal Prize. In 2005, Chang was awarded the Leontief Prize for Advancing the Frontiers of Economic Thought.

Praise for 23 Things They Don't Tell You About Capitalism:

“Chang, befitting his position as an economics professor at Cambridge University, is engagingly thoughtful and opinionated at a much lower decibel level. ‘The “truths” peddled by free-market ideologues are based on lazy assumptions and blinkered visions,’ he charges.”—Time

“Chang presents an enlightening précis of modern economic thought—and all the places it’s gone wrong, urging us to act in order to completely rebuild the world economy: ‘This will [make] some readers uncomfortable…[;] it is time to get uncomfortable.’”—Publishers Weekly

“Myth-busting and nicely-written collection of essays”—Independent (UK)

“For 40 years, I have worked as a journalist and trained thousands of other journalists from my former perches as a University of Missouri Journalism School professor and as executive director of Investigative Reporters and Editors. I have written newspaper articles, magazine features and entire books with heavy doses of economics policy and business behavior. I wish the book 23 Things They Don’t Tell You About Capitalism had been available when I was a rookie; I would have been more alert to the hands-off-business catechism by which Americans are relentlessly indoctrinated.”—Steven Weinberg, Remapping Debate

“Shaking Economics 101 assumptions to the core … Eminently accessible, with a clearly liberal (or at least anticonservative) bent, but with surprises along the way—for one, the thought that markets need to become less rather than more efficient.”—Kirkus Reviews

“I doubt there is one book, written in response to the current economic crisis, that is as fun or easy to read as Ha-Joon Chang's 23 Things They Don't Tell you About Capitalism.”—AlterNet Executive Editor Don Hazen

Despite USTR Kirk’s Rhetoric, Obama Administration Trade Approach Is More of the Same

Statement of Lori Wallach, Director of Public Citizen’s Global Trade Watch

Ambassador Ron Kirk says that the administration wants to restore Americans’ long-lost faith in our trade policy and repeatedly promises to truly fix Bush’s leftover job-killing trade deals – but, at the same time, he’s before Congress pushing forward three of Bush’s NAFTA-style deals for approval.

Slightly altering auto tariff schedules in Bush’s NAFTA-style agreement certainly is not a faith-restoring trade policy overhaul. The Korea trade deal is still projected to increase the overall U.S. trade deficit and cost 159,000 U.S. jobs. The Korea deal requires the kind of financial deregulation that contributed to the economic crisis. The deal still contains Bush’s ban on reference to the International Labor Organization conventions when enforcing its weak labor standards. This agreement even allows South Korean goods to be given the benefits of the agreement even if such goods contain inputs or parts from North Korea, despite our sanctions on trade with that country. And it still has sovereignty-eroding, public-interest-policy-chilling rules that allow multinational corporations to sue governments in private, foreign tribunals for taxpayer money. 

The administration had a chance to fix the many glaring problems in Bush’s NAFTA-style Korea agreement, but it didn’t. Kirk is right that the majority of Americans oppose another one of these job-killing trade deals.

Given the ugly battle that will ensue in Congress and with the American public over the Korea trade deal, we hope the administration will take a different approach with Colombia, Panama and the other countries with which it is now negotiating. With respect to Panama and Colombia, prior to any trade agreement being appropriate, Colombia’s deeply ingrained violence and Panama’s tax-haven status must be eliminated.

###

Workers Fight Back in the Rust Belt

Working families are taking back the heartland, out in the streets and even occupying the Wisconsin's state capitol building to demand their rights and demand that government work for them again.

For those who haven't heard, the fight is about a backwards budget bill that seeks to exploit budget difficulties to strip public workers of most all their collective bargaining rights, rolloing back +60 years of hard-won rights for working families - rights first won in Wisconsin. Former GTW staffer Mary Bottari and her new crew at the Center for Media and Democracy can get you all the latest news at their liveblog.

 

As you'll surely read if you check out CMD, it's a manufactured crisis. Big giveaways to the rich and to corporations have exacerbated the budget shortfall in Wisconsin, and now the governor there is pretending he has no choice but to take drastic measures. He disingenuinely faults people's rights for the fiscal mess caused by corporate giveaways, bailouts, and tax breaks.

It's a manufactured crisis, and it's linked to the manufacturing crisis. United Steelworkers president Leo Gerard spoke this past Monday at the state capitol, connecting the dots between this attack on workers, and unfair trade deals.

In Speech to U.S. Chamber, Obama Gets It Wrong on Trade, Jobs

Statement of Lori Wallach, Director of Public Citizen’s Global Trade Watch

    It’s unclear what is more mortifying: President Barack Obama choosing the club of America’s notorious job-offshorers to talk about the importance of creating American jobs, or his rallying of his fiercest political opponents to help him overcome the majority of Americans who oppose more-of-the-same job-killing trade agreements and pass a NAFTA-style deal with Korea that the government’s own analysis shows will increase our trade deficit.

    The U.S. Chamber of Commerce audience must have been thrilled to have Obama push more of the trade agreements that both help them offshore American jobs and, given that most Americans oppose more of these job-killing trade pacts, can help them achieve their political goal of replacing Obama in 2012.

    After winning key swing states by pledging to reform America’s job-killing trade policy, I suppose the Chamber is about the only place that President Obama could go to rally for more-of-the-same trade policies as if these had not resulted in a huge trade deficit and the net loss of 5.1 million manufacturing jobs and 43,000 factories since America started its experiment with the current trade model in the 1990s.

    As Paul Krugman wrote in a recent New York Times column (“Trade Does Not Equal Jobs,” Dec. 6): “If you want a trade policy that helps employment, it has to be a policy that induces other countries to run bigger deficits or smaller surpluses. A countervailing duty on Chinese exports would be job-creating; a deal with South Korea, not.” The Korea pact is projected to cost another 159,000 U.S. jobs – with nine economic sectors, including high-tech electronics, as losers. Obama’s comments on the pact “supporting” American jobs refers only to the export side of the equation without considering that the pact is projected to result in an overall larger U.S. trade deficit and thus net job loss.

###
 

SOTU Speech Includes 24 Mentions of Job Creation but Calls on Congress to Pass NAFTA-style Korea Free Trade Agreement That Is Projected to Increase U.S. Trade Deficit, Cost U.S. Jobs

Statement of Lori Wallach, Director of Public Citizen's Global Trade Watch
 
It was beyond surreal to hear President Barack Obama talk about the priority of creating U.S. jobs while saying nothing about on fixing our China trade debacle and calling on Congress to pass a NAFTA-style trade agreement with Korea that the government’s own studies show will increase our trade deficit. The Korea pact is projected to cost another 159,000 U.S. jobs – with nine economic sectors, including high tech electronics, as losers.

As Paul Krugman wrote in a recent New York Times column ("Trade Does Not Equal Jobs,” Dec. 6, 2010): “If you want a trade policy that helps employment, it has to be a policy that induces other countries to run bigger deficits or smaller surpluses. A countervailing duty on Chinese exports would be job-creating; a deal with South Korea, not.”

Doing more of the same – more NAFTA-style deals like the Korea pact and continuing the unbalanced mode of China trade – is not going to create American jobs or reduce our trade deficit. After campaigning on the need to reform America's job-killing trade policy, it is stunning for President Obama to call for more-of-the-same trade policies as if these had not resulted in a huge American trade deficit – $810 billion before the economic crisis-related collapse in trade and now again rising – and the net loss of 5.1 million American manufacturing jobs and 43,000 factories closed since we started the damaging experiment with the current trade model in the 1990s.

 

With China’s Currency Policy a Tough Topic of Hu Visit, Obama Poised to Push Korean Trade Deal With No Mechanism to Counter, Stop Currency Manipulation

With the trade advantage gained by China’s currency manipulation a top focus of Obama’s meeting with Chinese President Hu Jintao on Wednesday, concerns will rise about entering into yet another trade agreement with no provisions that forbid or redress currency manipulation with another known currency manipulator: South Korea.

Read our press release here.

How much will this party cost?

Earlier this month, the Washington Post reported a dramatic uptick in the number of corporate investor challenges being heard by the International Centre for Settlement of Investment Disputes (ICSID) - a World Bank group charged with arbitrating investment disputes. So much so, that a new legal niche is growing to meet the demand:

Geography has been kind to the District law firms equipped to handle international dispute resolution. As the host city of the ICSID, which has seen its caseload grow from between one and four cases a year from 1972 to 1996 to an apogee of 37 cases in 2007 and 27 in the fiscal year of 2010, the attorneys here are in close proximity to the action. The nation's capital is also seen as a key connection point between Latin America, where nearly a third of ICSID cases originate, and the rest of the world. The Argentine economic crisis of the late 1990s and early 2000s prompted at least 40 ICSID cases on its own, prompting the country to open a special District office to oversee its interests here.

There must a better way to create jobs in Washington, DC - perhaps a way that doesn't also facilitate the  trampling of local public health and environmental protecions or drain taxpayer resources in the United States and in trading partner countries? For more details about the kinds of cases multinational investors bring before ICSID, see Public Citizen's NAFTA Chapter 11 database. Also read up on El Salvador's struggle to preserve its environment in the face of two recent CAFTA cases challenging Salvadoran mining policy decisions. 

In the coming months the U.S. Congress will decide whether to expand the ICSID party! If implemented, the Korea FTA would empower hundreds of U.S. and Korean multinational investors to bring suits against the U.S. and Korean governments at ICSID should they want to argue that their slew of new investor rights has been violated.

Panama's “Blackmail” and “Threats” Against the US: Can Panama be Trusted?

By signing a weak Tax Information Exchange Agreement (TIEA) with the U.S. last month, Panama has tried to portray itself as finally coming out of the tax haven shadows so that Congress will approve the Panama FTA. Despite the signing of the TIEA, there still remains the question of whether Panama will faithfully implement the TIEA over the next year. Accumulating evidence suggests we can't trust the government of Panama to end its status as one of the largest tax havens in the world.

This Sunday, the New York Times reported on how the Panamanian President, immediately after being elected in July 2009, attempt to coerce the U.S. Drug Enforcement Administration (DEA) into using its wiretapping technology to wiretap his political opponents:

The United States, according to the cables, worried that [Panamanian President Ricardo] Martinelli, a supermarket magnate, “made no distinction between legitimate security targets and political enemies,” refused, igniting tensions that went on for months.

Mr. Martinelli, who the cables said possessed a “penchant for bullying and blackmail,” retaliated by proposing a law that would have ended the D.E.A.’s work with specially vetted police units. Then he tried to subvert the drug agency’s control over the program by assigning nonvetted officers to the counternarcotics unit.

And when the United States pushed back against those attempts — moving the Matador system into the offices of the politically independent attorney general — Mr. Martinelli threatened to expel the drug agency from the country altogether, saying other countries, like Israel, would be happy to comply with his intelligence requests.

The New York Times' reporting is based on several secret diplomatic cables recently released by Wikileaks. One cable dated August 2009 offered a frank assessment of President Martinelli's attitude toward following the law:

Martinelli's seeming fixation with wiretaps and his comments to [the U.S.] Ambassador during an August 12 meeting demonstrate that he may be willing to set aside the rule of law in order to achieve his political and developmental goals....He chided the Ambassador for being "too legal" in her approach to the issue of wiretaps.

On other matters of law such as drug trafficking itself, the diplomatic cables paint a dark view of the Panamanian government, noting that each month President Martinelli's cousin helps smuggle millions of dollars of drug money through Panama's main airport. Since President Martinelli apparently can't be bothered to follow the laws of his own country, how can his government be trusted to follow an international agreement and help the U.S. government ferret out tax dodgers?

Bombshell Australian Report Finds FTAs "Oversold"

Yesterday, the Australian Government's Productivity Commission released a 400-page report examining the effects of Australia's "Free Trade" Agreements (FTAs). The Productivity Commission is the Australian Government’s independent research and advisory body on economic and social issues. The Age reports:

The Productivity Commission has told the government there is little evidence to suggest Australia's six free-trade agreements have produced ''substantial commercial benefits''....

Copyright provisions inserted in the US-Australia Free Trade Agreement could eventually cost Australia as much as $88 million per year....

The report also rails against investor-state lawsuit provisions like NAFTA's Chapter 11 that allow foreign corporations to sue sovereign governments for taxpayer compensation when governments take necessary action to protect the health and safety of their citizens: "There does not appear to be an underlying economic problem that necessitates the inclusion of ISDS [Investor-State Dispute Settlement] provisions within agreements.....Experience in other countries demonstrates that there are considerable policy and financial risks arising from ISDS provisions." The report goes on to note that millions of dollars of taxpayer funds has been paid out to multinational corporations due to corporate lawsuits filed under NAFTA's investor-state dispute settlement provisions. 

The report recommends that the Australian government "seek to avoid the inclusion of investor-state dispute settlement provisions in [FTAs] that grant foreign investors in Australia substantive or procedural rights greater than those enjoyed by Australian investors."  Australia excluded investor-state lawsuit provisions from the U.S.-Australia FTA due to justified fears that foreign corporations would demand compensation if environmental or public interest laws reduced their "expected profits."  The Australian trade negotiators would be wise to heed the well-reasoned recommendations of the Productivity Commission and ensure that investor-state lawsuit provisions are excluded from the proposed Trans-Pacific Partnership.
 
The report notes that the totality of evidence on FTAs "suggest that the economic value of Australia’s [FTAs] has been oversold." That sounds familiar. Oh, that's right, Public Citizen found that the same was true for U.S. FTAs in our September report, "Lies, Damn Lies, and Export Statistics: How Corporate Lobbyists Distort the Record of Flawed Trade Deals," in which we revealed that U.S. exports to FTA partners have grown at half the pace of U.S. exports to the rest of the world. There seems to be a consensus developing here.

U.S. Best Served By Fair Trade with South Korea

Check out this op-ed by Todd Tucker in today's San Francisco Chronicle.

 
"Obama administration officials are in Seoul this week for talks that could well determine the president's re-election prospects. Last week, the president said that he would give the 'maximum effort' to resolve problems with the U.S.-South Korea trade deal inked by President Bush. The next few days will show whether the president intends to adopt the controversial deal as his own, or push for significant reforms that could gain broad support..."

Read the entire piece here.

Election 2010: The Best Defense Was a Good Fair Trade Offense

Our 2010 election report is out!

Get all the details of how trade factored into the campaigns here.

 
House Democrats that ran on fair trade platforms in competitive and open-seat races were three times as likely to survive the GOP tidal wave than Democrats who ran against fair trade.

The GOP tsunami obliterated many candidate-specific features of the midterm contests, but trade, job offshoring and/or government purchases of foreign-made goods were a stunningly persistent national focus of midterm election campaigns, with 205 candidates campaigning on these issues. A record number of 75 Republicans adopted some fair trade messaging as well, 43 of whom won their races. More than sixty races became "fair trade offs," where both the Democrat and Republican ran on fair trade themes. Only 37 candidates campaigned in favor of more North American Free Trade Agreement (NAFTA)-style trade agreements - about half of these candidates lost.

There were also a record 220+ campaign ads on trade.

Read the press release, view the full report, and watch all the ads here.

Nationwide, candidates attack jobs and tax dollars going overseas, but why?

Check out this AlterNet piece by Lori Wallach and Todd Tucker to find out.

 
"This election season, hundreds of candidates across the country are campaigning on their opposition to jobs and tax dollars going overseas. This makes sense, given poll returns that show opposition to unfair trade practices is one of the few things that unite Americans of different incomes and political parties. But many of the politicians’ 30-second television ads do not explain why this offshoring is happening..."

Read the entire piece here.

Follow the Climate Reality Tour!

We’re pleased to unveil an exciting new project: the Climate Reality Tour.

You may have caught an earlier post, but in case you didn't, let's fill you in The Climate Reality Tour is a movement-building road trip to promote global economic policies that are fair for workers and shift away from the climate- and job-destroying status quo. The destination? The United Nations Climate Negotiations in Cancun in late November. And to bring home the sustainability point, we decided to go by bike. Yep, by bike!

With the world in the grips of overlapping global crises – food, economic/financial and climate – the stakes are high indeed. To save the planet requires confronting these crises simultaneously, and that means overcoming the false jobs vs. environment trade-off. In truth, corporations benefit from exploiting both while human beings and the earth suffer.

But this requires political will and resolve far beyond what we’ve seen from either political party, and even many leading civil society organizations. At Public Citizen, we’ve long believed our unsustainable global economic order, as etched in the tomes of the WTO and NAFTA-type trade deals, unfairly pits workers and ecosystems against one another. We’ve decried how the status quo sanctifies the rights or multinational corporations to exploit and destroy – even above the democratic rights of a people determine their own economic and eological futures.

Chamber of Commerce Pushes Offshoring

The folks at Think Progress have been following the breadcrumbs and connecting the dots on unfair trade policies and corporate influence in elections.

Think Progress reports on a program sponsored by the Chamber of Commerce, a corporate interest group, and the Chinese government that puts together workshops on how to offshore work to China. Given the Chamber’s attitude toward offshoring, perhaps we should have expected to find this type of program. As far back as 2004, Tom Donahue, CEO of the Chamber, said that “there are legitimate values in outsourcing - not only jobs, but work.”

This pro-offshoring attitude goes hand-in-hand with the Chamber’s push to approve the unfair Bush-negotiated Colombia, Korea, and Panama Free Trade Agreements (FTAs). Tom Donahue recently claimed that passage of these trade pacts will create millions of jobs, but in reality the FTAs will just make it easier for corporations to offshore jobs abroad. That’s the last thing we need in the middle of this jobs crisis.

Think Progress also reports on how foreign corporations that provide offshoring services have been funneling thousands of dollars to the Chamber of Commerce’s political ad account.   The Chamber of Commerce has been using this political ad account to attack champions of fair trade policies this election cycle.

(Disclosure: Public Citizen has no preference among the candidates for office.)

FAIR's "CounterSpin" and The Thom Hartmann Program Feature Our FTA Export Penalty Report

CounterSpin, Fairness and Accuracy in Reporting's (FAIR) nationally-syndicated radio show, airs its interview with our research director, Todd Tucker, today. It sets the record straight about our new report, "Lies, Damn Lies, and Export Statistics." You can listen below; the segment begins at 18:19.

TNT on FAIR's CounterSpin, 9.24.10

Todd was also on the Thom Hartmann Program last week talking about the report. Check it out; the segment begins 1/3 of the way through.

TNT on Thom Hartmann, 9.17.10

 

Your Tax Dollars Going to Foreign Banks? Lori Wallach Comments on CNN.

The Congressional Oversight Panel issued a report last week that showed much of the bailout money ended up going to foreign banks. Does that strike you as odd - or maybe even bad? If so, you should know that, under WTO rules, the U.S. has to give equal treatment to foreign and domestic banks.

As Lori Wallach put it, "Under the current World Trade Organization rules, the United States is pretty much required to take our tax dollars and, on the down side, bail out things that don't work. But the U.S. taxpayers don't get the profit for those risks on the upside when that globalization finance is profitable for the banks."

Click here to see Lori Wallach's comments on CNN's "The Situation Room."

Korea FTA Needs Some Fixin'

On Saturday, President Obama announced at the G-20 that his administration will move forward with the South Korea FTA and submit it to Congress for approval soon.  You can read the quick reaction from our own Lori Wallach here.  Today happens to be the three-year anniversary of the signing of the Korea FTA, and we know what that means: the FTA was negotiated by Bush for the benefit of his cronies in big business and before the financial crisis rocked the global economy.  The Korea FTA contains all the anti-democratic NAFTA and CAFTA investor-state lawsuit provisions that allow corporations to sue governments if the governments implement regulations that could reduce their profits (as we’ve seen recently with the El Salvador mining case). 

The Korea FTA also contains extremely deregulatory provisions in financial services which are in some ways more deregulatory than any other trade agreement to date.  This type of financial deregulation is completely inappropriate now that we have witnessed how financial “wizards” can devastate the economy with their wild, unregulated derivatives trading and risky gambling.  Furthermore, it contradicts the congressional efforts underway right now to re-regulate the financial sector.  The dangerous investor-state lawsuit provisions and financial services deregulation in the Korea FTA need to be stripped out before it is brought before Congress.

The Korea FTA, based on the flawed NAFTA model, could also be a disaster for working families.  Several studies on the Korea FTA as it is currently written illustrate the consequences of trying to pass the Korea FTA as it stands:

Dr. Robert Scott at the Economic Policy Institute (EPI) recently released a report on the probable employment impacts of the current version of the Korea FTA. His analysis found that the implementation of the Korea FTA would cost the U.S. about 159,000 net jobs over the next seven years due to a $13.9 billion increase in the U.S. deficit with Korea.

The U.S. International Trade Commission (USITC), an independent federal body that analyzes the likely effects of trade agreements for Congress, also found that the Korea FTA would result in an increase in the total U.S. trade deficit (see Table 2.3 in the report).  The structure of their model does not allow the total number of people employed to vary, so their report does not contain a net job loss estimate to accompany the estimate of the increased deficit. However, the USITC does have sector-by-sector estimates of employment changes, which show that workers in high-paying manufacturing industries will lose in the agreement (see Table 2.4 in the report).  The electronic equipment industry, for instance, will shed up to 0.4 percent of its workers.  The U.S. auto industry is projected to lose about 0.2 percent of its workforce due to the Korea FTA.

Of course, the corporate lobbyists have stepped up with their misleading models that predict job growth. One such study by the Chamber of Commerce predicts that hundreds of thousands of jobs would be created by the implementation of the Korea FTA.  A major problem with the report is that it only mentions the impact, under their model, of the Korea FTA upon exports.  Nowhere does it give an estimate of the increase in imports due to the FTA.  In a study on the economic impact of a trade agreement, you’d expect at a minimum to read estimates of the impact on both sides of trade flows, not just exports.  The Chamber study doesn’t give an estimate of the import impacts and is vague in its methodology section, which leaves the reader wondering if the Chamber study accounted for the effects of rising imports at all. A study failing to account for the rise of potentially job-killing imports would completely miss the mark on the jobs impact of an FTA.  The EPI and USITC studies, which explicitly account for changes in imports, are much more reliable than the Chamber study.

With his announcement to fix the Korea FTA, President Obama has a historic opportunity to chart a new course in trade policy that benefits workers, maintains democratic control over public policy, and promotes economic stability rather than handing more power to multinational corporations and big banks as trade policy over the last 20-plus years has done.  Let’s hope he seizes the moment.

 

Lori Wallach’s full statement on Obama’s announcement is after the jump:

 

Drug Trials Abroad Keep Auditors Away

We’ve seen manufacturing jobs, IT jobs, customer service jobs, and engineering jobs offshored.  We can now add prescription drug trials to that list. The New York Times reports:

Medical ethicists have worried for years about the growing share of new drugs whose human trials took place in foreign countries where federal auditors could not make sure patients were protected, but no one knew how big the potential problem was.

But according to a report by Daniel R. Levinson, the inspector general of the Department of Health and Human Services, 80 percent of the drugs approved for sale in 2008 had trials in foreign countries, and 78 percent of all subjects who participated in clinical trials were enrolled at foreign sites....

The report “highlights a very frightening and appalling situation,” said Representative Rosa DeLauro, Democrat of Connecticut. “By pursuing clinical trials in foreign countries with lower standards and where F.D.A. lacks oversight, the industry is seeking the path of least resistance toward lower costs and higher profits to the detriment of public health.”

Sure, testing the drugs in lower-income countries is cheaper, but how sure can we be that the trial subjects are giving informed consent when foreign drug trial laws are often weaker than U.S. laws?  And how easily can the FDA audit a foreign testing site to ensure that the trial followed all correct procedures? Not very easily. In fact, the Inspector General’s report found that the FDA was 16 times less likely to audit foreign sites than they were to audit a domestic site, partially due to the high cost of auditing foreign sites.  It’s crucial that the FDA be able to verify that proper clinical procedures are followed. Otherwise, drugs that are unsafe or ineffective could be put on the U.S. market, endangering people’s lives.

It's a Family Affair for Death Squad President

Colombian President Alvaro Uribe's post-retirement life just got more complicated. The Washington Post has published new allegations that the reluctantly outgoing Latin American leader and his brother are integrally linked to paramilitary death squads that kill civilians, trade unionists, and community leaders.  

The Post brings us up to speed and drops the new bomb:

But Uribe's government has also been tarnished by scandals, including accusations in congressional hearings that death squads hatched plots at his ranch in the 1980s and revelations that the secret police under his control spied on political opponents and helped kill leftist activists.

Now a former police major, Juan Carlos Meneses, has alleged that Uribe's younger brother, Santiago Uribe, led a fearsome paramilitary group in the 1990s in this northern town that killed petty thieves, guerrilla sympathizers and suspected subversives. In an interview with The Washington Post, Meneses said the group's hit men trained at La Carolina, where the Uribe family ran an agro-business in the early 1990s. 

Regular EOT readers will not be surprised that Uribe's death squad links continue to surface. But the most recent incidents of death threats shocked even me. As Dan Kovalik notes on the HuffPo:

On May 13, 2010, staff from the Washington Office on Latin America ("WOLA"), a D.C.-based human rights organization, met with long-time Colombian Ambassador Carolina Barco at the Colombian Embassy in Washington. At this meeting, WOLA staff, including Gimena Sanchez, expressed their concern for the safety of a number of its human rights partners in Colombia who, in the words of WOLA, have been victimized by "threats, sabotage of activities and baseless prosecutions." WOLA is taking the threats against its partners very seriously as a number of leaders from social groups, particularly from Afro-Colombian and Indigenous groups, have been killed in recent months.

On May 14, the very next day, WOLA received a death threat directed to itself as well as 80 other Colombian human rights, Afro-Colombian, Indigenous, internally displaced and labor rights organizations and individuals. See, WOLA Press Statement. This threat, from the Colombian paramilitary group known as "The Black Eagles," stated: "as so called human rights defenders don't think you can hide behind the offices of the Attorney General or other institutions . . . we are watching you and you can consider yourselves dead." As WOLA noted in an open letter dated May 17, The Black Eagles go "on to falsely accuse the listed organizations of having links to the FARC guerillas and as such declaring themselves military targets."

If this doesn't suggest that the Colombian diplomatic and government structure in corrupted to the core, I don't know what does. Such a brazen threat against a U.S. based human rights group suggests  paramilitary armed groups are feel emboldened, not restricted, under Uribe's so-called 'Anti-Democratic InSecurity" policy.

As Uribe leaves office he loses institutional power and teflon political veneer. It makes you wonder what other evidence of Uribe's linkages to human rights atrocities will surface, and if he'll ever see his day in court. It also makes you wonder what why some in Congress could see anything but continued human rights tragedy resulting from ratifying a failed trade policy with a country where links to atrocities already run straight to the top.

(Hat tip to, and a single tear for, maestro photographer and former GTW staff, Brandon Wu. The photo credit - his first EOT hit since moving on toward grad school - is all his)

CAFTA Case Challenges Mining Laws

Earlier this week, an arbitration panel at the World Bank heard the first round arguments of the first environmental case under the investor-to-state arbitration mechanism of the Central America Free Trade Agreement (CAFTA) to date.  The case stems from Pacific Rim’s bid to establish a gold mine in the basin of El Salvador's largest river, Rio Lempa.  Pacific Rim planned to use hundreds of tons of cyanide and hundreds of millions of liters of water per year to recover the gold from the ore, threatening the water resources that thousands of people rely upon.  

Initially Pacific Rim possessed a permit to conduct exploration activities near Rio Lempa, but regulations required it to submit a feasibility study and gain government approval before it could begin actual exploitation of the mine.  Although Pacific Rim applied for an exploitation permit, it failed to submit the feasibility study.  In the face of growing opposition, Pacific Rim

never completed a feasibility study necessary to obtain an exploitation permit for its mine and the government did not issue the exploitation permit.

In December 2008, Pacific Rim formally launched a CAFTA claim for hundreds of millions of dollars in compensation, claiming that El Salvador’s actions constituted discriminatory treatment and expropriation of its investment.  CAFTA’s investor-to-state dispute settlement provision is very similar to NAFTA’s investor-to-state provision in which foreign corporations can claim damages if a government action, including environmental regulations, constitutes expropriation of an investment or discriminatory treatment. Under NAFTA, several environmental and public interest laws have been challenged in the United States, Canada, and Mexico (see our page on these cases here for more info).  It seems that trade negotiators did not learn the lesson from NAFTA and included this investor-state provision in CAFTA, opening the door to outrageous challenges to essential environmental laws like we now see in the Pacific Rim case.

On Monday and Tuesday the tribunal at the World Bank heard Pacific Rim and El Salvador wrangle over El Salvador’s preliminary objections to the case proceeding. Lawyers for El Salvador argued that El Salvador was properly following its own mining laws and that these laws apply equally to all mining companies so they cannot be discriminatory.  Lawyers for Pacific Rim, on the other hand, mostly argued procedural questions.  The arbitration panel is expected to render its decision by August 2^nd, at which point either the case will be dismissed or hearings on jurisdiction and standing will proceed. A video of the hearings can be viewed here.

You can take action to ask President Obama to exclude these investor-to-state arbitration provisions from future trade agreements here.

ONI Debate Heats up...in Bermuda

Yesterday, eight insurance lobbying groups released a letter opposing Senator Merkley’s amendment to the financial re-regulation bill that we discussed last week.   Merkley’s amendment would strip out a provision in the bill that allows a newly-established Office on National Insurance (ONI) to unilaterally negotiate and approve international insurance agreements that give foreign insurers broad new privileges.  The ONI could then preempt state laws that conflict with the agreements.

It’s not surprising that big insurers would launch an attack on the right of states to regulate their insurance markets. What is surprising is that one of the lobbying groups signing onto the letter is the Association of Bermuda Insurers and Reinsurers.  Yes, that’s right, insurance corporations that have benefited from the lax tax laws in Bermuda for years are now looking to tear down regulations through the ONI.

As small as Bermuda may be (only 68,000 people live on the island), Bermuda is second only to the U.K. as a home to foreign insurers in the United States. About 17 percent of foreign insurers in the U.S. are incorporated in Bermuda, compared to 18 percent that are incorporated in the U.K.

So, we must ask Senators who have not yet committed to supporting the Merkley amendment: Will you fight to preserve the right of states to regulate their insurance markets, or will you let tax-skirting insurance corporations in Bermuda erode crucial consumer protections?

(Thanks to Flikr user p_snelling for the photo)

Office of National Insurance: Subverting Democracy?

Proponents of NAFTA-style trade agreements are trying to pull a fast one on us by sneaking some devastating provisions into the Senate financial reform bill.  Right now there is language in the bill that creates an Office of National Insurance (ONI) within the Treasury Department that would strike down state insurance policies if the ONI believes that they violate trade agreement rules.  The ONI would also be able to negotiate and approve new agreements that give foreign insurers greater rights without having to ask for approval from Congress first.  Senator Jeff Merkley is leading the charge with an amendment to the bill that would prevent this dangerous seizure of state and congressional authority. Click here to urge your Senator to support Merkley’s amendment.

Think this is something that only threatens states like New York, where there are lots of foreign companies? Think again. Consider the stakes for Sen. Susan Collins of Maine, where the following foreign-owned insurance companies could benefit from an international trade pact drive towards lower regulation:

Great-West Lifeco Inc., based in Canada

Cunningham Lindsey Group Inc., based in Canada

Willis Group Holdings Limited, based in the U.K.

In fact, there are foreign insurance companies in every state in the Union that could take advantage of any new rights that the ONI would give them.  Check out the chart below to see the number of foreign insurance firms operating in your state.  Keep in mind, however, that the presence of even one firm would be enough to create problems for state insurance regulations.

  

If Congress wants to rein in Wall Street...

If the Senate wants to create a strong financial regulation, there is still much to be amended in the current financial regulatory bill. One of these needed amendments concerns our nation’s trade policy and the World Trade Organization's involvement in financial deregulation. Check it out in Citizenvox's latest : If Congress Wants to Rein in Wall Street, It Must Strengthen Financial Reform Bill !

10 out of 10 Economists Agree: We Were Wrong

After about a year of wrangling, we’re now into the final stretch of financial regulatory reform!  Sen. Dodd of the Finance Committee, Rep. Frank of the Financial Services Committee, and the White House have all said that a financial reform bill will likely be on the President’s desk by Memorial day.

As Global Trade Watch has extensively documented, the United States, in cooperation with other countries, must overhaul the WTO’s radically deregulatory financial services provisions if it wishes to enact meaningful financial regulatory reform.  Regulations specifying a maximum size of financial firms and prohibiting certain risky types of financial trading could be vulnerable to challenge under the WTO’s dispute settlement mechanisms.

Members of Congress must push back hard against those who are trying to remove the teeth from the reform proposals.  Wishful thinking about the capacity of financial services corporations to properly mange huge risks does not negate the fact that a tough regulatory framework is necessary.  This fact is illustrated quite clearly in the results of a 2004 survey of 84 finance professors conducted by the International Swaps and Derivatives Association. This survey would be a barrel of laughs if the consequences of these attitudes weren’t so disastrous.

Some of the highlights:

• 100 percent of respondents agreed with the statement that “Derivatives help companies manage financial risk more effectively.”
• 99 percent of respondents agreed that “The impact of derivatives on the global financial system is beneficial.”
• 81 percent of respondents agreed that “The risks of using derivatives have been overstated.”

It’s disheartening that these “experts” could not fathom the role that derivatives would play in the 2008 financial meltdown.  In their extended comments, many of them claimed that derivatives helped promote financial stability:

“[Derivatives] allow the transfer of risk from parties that don't want to bear risk to parties that can. For example, credit derivatives make the banking system safer.”

- James Angel, Associate Professor of Finance, Georgetown University: McDonough

Happy April Fool's Day!

 

NOT FOR RELEASE

Contact: Nanahcub Nayrb, 202-454-5108

China Currency Value Rises 40%, U.S. Predicted to Enjoy First Trade Surplus with China Since 1985

After Overnight Renminbi Appreciation, Trade with China to Actually Provide Benefits to U.S. Workers, Domestic Firms

WASHINGTON - With Congress poised to pass the "Nixon Did It in '71 Currency Manipulation Fix-It Act," which would impose surcharges on Chinese imports, China today appreciated the value of its currency 40 percent relative to the U.S. dollar, Google News reported.

The Obama administration predicted that its goal of doubling U.S. exports in five years would be met well ahead of time with the United States expected to achieve a trade surplus with China for the first time since 1985. China is also expected to begin transferring billions in stimulus funds to the United States to create 2.4 million American jobs to replace the U.S. jobs lost to China since 2001.

Trade wonks were stunned.

"Years ago, I made a bet with Fred Bergsten that I would eat my shoe if anything like this ever happened," said Walli Lorach, co-director of Public Citizen's Global Trade Watch. "I guess I'm going to spend the afternoon looking for a good leather recipe."

In a gesture of goodwill and reciprocity between the two countries, President Barack Obama pledged that the United States would continue to purchase billions in Chinese goods, although at a fair price, and would safeguard the value of China's billions in Treasury bills by not devaluing the dollar.  

In another tale from the bizarro world of U.S. trade policy, a news conference organized by Sen. John McCain to call for the Obama administration to revive the Bush-Clinton-Bush trade agreement model in Trans-Pacific Partnership (TPP) negotiations was disrupted by angry tea party protestors screaming "No NAFTA with 'Nam!"

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Clinton Reversal on NAFTA Model?

While former President Clinton was visiting Haiti last week, he revealed that his views on trade policy have undergone some transformation since leaving office:    

At a news conference in Port-au-Prince Monday, Clinton said when he helped Haitian President Jean Bertrand Aristide return to power in 1994, Clinton also signed legislation that increased the flow of cheap American rice into Haiti.

But now, he says, "I think it was a mistake. I think it was part of a global trend that was wrong-headed."

Clinton says the theory behind that global trend was that wealthy countries could provide poorer countries with cheaper food than their farmers could grow.  That would lead poor countries to skip directly to industrialization. But Clinton says, once he left office and saw the effects of that policy on farmers in developing countries, he changed his mind.

"It is unrealistic to expect that a country can totally obliterate its capacity to feed itself and just skip a stage of development," he says. "It seems almost laughable now that we ever thought it."

It’s heartening to see one of the strongest proponents of the neoliberal economic model come to realize just how damaging that model has been. For Mexico, though, this realization has come about 16 years too late.

When NAFTA entered into force in 1994, cheap subsidized American corn from corporate farms flooded the Mexican economy, forcing hundreds of thousands of small corn farmers to leave their farms.  Many of these farmers, faced with corn prices below their cost of production, often had no choice but to emigrate to the U.S. to escape economic disaster.  During the 2007-2008 global food price crisis, poor Mexicans found out exactly how costly the destruction of the Mexican corn industry could be when tortilla prices, propelled by U.S. corn prices, skyrocketed by 60 percent within a few months.  

Now that Clinton has seen the flaws of the unfair trade model epitomized by NAFTA, could he press Obama to renegotiate NAFTA to make it fair for consumers, workers, and farmers in all three NAFTA countries?

(Thanks to Flickr user talkradionews for the photo)